Back in January, the North American HD DVD Promotional Group announced that Asian manufacturers would be making HD DVD players this year, and that announcement seems to have gained some strength with a news article in Video Business that states that the Steering Committee of the DVD Forum has approved a China-only version of the HD DVD standard that allows for a specific video encoding technology (called AVS) to be used exclusively for the Chinese market:

In the rest of the world, HD DVD supports VC-1, H.264 and MPEG2. The China-only version supports only the Chinese-developed Advanced Video System (AVS).

In nearly every other respect, including the physical specifications of the disc, the interactive layer and the optics, the two versions are identical.

The purpose of the China-only version is to spare Chinese manufacturers the licensing fees associated with the global codecs on decks sold in China and to help propel China into the ranks of technology developers, rather than simply manufacturers.

But manufacturing HD DVD players they will be. And once those production lines are up and running, swapping out the codecs for their outside OEM clients is no big deal.

In other words, HD DVD just secured the inside track on a potentially vast new market. The economies of scale that could result from China’s embrace of HD DVD is likely to have significant impact on retail prices in every market that sources its electronics from China—that is, the rest of the world.

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